Pepco, Exelon Reach Settlement With D.C., Clearing Way for Merger

Power companies Pepco and Exelon have negotiated a settlement with District of Columbia officials that clears the way for the two companies to merge.

D.C. Mayor Muriel Bowser announced the settlement Tuesday.

Bowser says that in addition to other terms, Exelon will invest $78 million in the city, up from a proposed $14 million. The city had previously rejected the companies' proposed $6.8 billion merger.

She said the companies had committed $17 million to conserve natural resources, including more use of wind power and solar power. The companies also agreed to improve reliability and set up a $25 million fund to keep electric rates affordable. 

Customers would get a credit averaging $50 within 60 days of the merger, Bowser said. 

The company also agreed to relocate 100 positions to D.C. and hire 102 union employees within two years, Bowser said. She asked regulators, who still must review the deal, to support the merger.

The benefits weren't enough for the Chesapeake Climate Action Network , which put out a statement calling the deal "historically bad." 

"The backroom cash deal Exelon has offered to Bowser provides only illusory benefits and does nothing to correct the structural harm that will come by giving Exelon monopoly control over DC ratepayers," the CCAN statement read.

The companies had argued that the merger would stabilize electricity rates and enhance the reliability of electric and gas service. Opponents had argued the merger wouldn't benefit ratepayers.

The city was the only jurisdiction to reject the proposed merger between Chicago-based Exelon and Washington-based Pepco. Maryland and Delaware regulators approved the deal.

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